Insights: Bullish Restaurant Stocks
Key Points:As we all know, the restaurant industry is super competitive and has one of the highest failure rates of any industry. This fact may be working in their favor, however, as compared to retailers, which are overbuilt and are struggling to compete against Amazon's online machine and its growing market share of the retail dollar. The market seems poised and is again embarked in another leg up, and the Consumer Discretionary Sector should participate . . . in a normal world. While the home builders and complementary groups/stocks are benefitting from an improving economy/jobs and the environment of slowly rising interest rates, the retailers continue to be plagued with uncertainty and less-than-robust earnings. The restaurants, however, are not only benefitting from a surge in industry consolidation, but are posting some pretty friendly earnings results as well. The following is a thorough dissection of our restaurant Groups and most attractive component companies. There is a LOT of interesting names, and we expect a surge of relative performance in the Group.
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BJ's Restaurants operates in the casual dining segment of the restaurant industry. The company's restaurants feature a number of menu offerings including: slow roasted entrees, such as, prime rib; EnLIGHTened Entrees? such as its Cherry Chipotle Glazed Salmon; its deep-dish pizza; the Pizookie? dessert; and its BJ's proprietary craft beers. The company owns and operates restaurants located in various states, and its proprietary craft beer is produced at various locations, its Temple, TX brewpub locations and by independent third party brewers using its proprietary recipes. The company also produces its proprietary non-alcoholic craft sodas including root beer, ginger beer, cream, orange and black cherry soda.
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